Tuesday, October 9, 2007

Why the Best is the Best

Whenever I enter a Ritz-Carlton hotel, I know “I’m not in Mediocreville anymore!” Walking through those doors transports me to a world unparalleled in service, with guest amenities and services consistently beyond my expectations. Unlike the Wizard of Oz, the hotel is everything it purports to be.

I’m not a shill for The Ritz-Carlton, but, like other quality professionals, I’m a fan of extraordinary customer service and of organizations that exude professionalism and exceed customers’ expectations, and The Ritz-Carlton is one of those organizations. In the July issue of Consumer Reports, the magazine’s subscribers agree that, “The Ritz-Carlton earns top marks in value, service, upkeep, and making problems go away.”

This two-time Malcolm Baldrige National Quality Award winner (1992 and 1999) has set the standard in the hotel industry for unparalleled service. In addition, Training magazine recently ranked it No. 1 for employee-sponsored workforce training and development. Based on those accomplishments, I wanted to discover what was behind the curtain, so to speak. How does this company of 40,000 employees maintain its mystique and what lessons can other companies learn from it?

First, I interviewed vice president for quality and program management John Timmerman, who is responsible for the hotel’s quality worldwide. I also interviewed area human resources director Laura Gutierrez, who is responsible for human resources in Dearborn, Michigan, St. Louis, Cleveland, and Philadelphia. Both are long-term employees, which is consistent with the company’s low turnover rate. I came away from both interviews in awe of their strategic-planning methodology and the manner in which the hotel and its ladies and gentlemen, as they are called, constantly look for ways to strengthen service.

By the way, no Baldrige applicant has achieved a perfect score of 1,000, and the final assessments always allow for many opportunities for improvement. In that regard, The Ritz-Carlton continually seeks best practices from other organizations and from their own properties that can be incorporated worldwide, and it listens closely to the needs, wants, expectations, and suggestions of guests.

As I reviewed my interview notes with Timmerman and Gutierrez, I decided to present nuggets of information that reflect the processes ingrained in the hotel and thus have those nuggets stand alone as benchmarks for other organizations. So sit back and enter a world of customer excellence with me.

  • Guests return to The Ritz-Carlton because they are emotionally engaged with the hotel, as validated by The Gallup Organization, which reports Ritz-Carlton performance at greater than the 90th percentile of their global database of consumers. That means that The Ritz-Carlton’s guests return even if a competitor offers a lower price. That’s loyalty.
  • Part of the hotel’s mystique comes from fulfilling even the unexpressed wishes and needs of the guests. This is accomplished by having the empathy to know what thrills guests and how the staff can make the visit memorable. This is accomplished in conversations with guests and by maintaining a knowledge-management system that records the preferences of every guest. Maybe it’s a favorite magazine or wine, or dessert or cappuccino. Whatever the case, the staff goes out of their way to dazzle the guests, thus strengthening those relationships.
  • Customer feedback is obviously an important part of the improvement process. Simon Cooper, president and chief operating officer, states, “When it comes to customers, feelings are facts.” The Ritz-Carlton deploys multiple methods to capture the customer experience, such as comment cards and a follow-up survey call from the Gallup organization to guests after their stay. In addition, the staff discreetly look, listen, and ask for feedback during transactions and moments of truth to build upon the Ritz-Carlton knowledge-management system. In addition, there’s a follow-up survey conducted by The Gallup Organization, which provides third-party validation. Finally, mystery shoppers circulate though the various properties to critique the processes.
  • The feedback report on the company’s first Baldrige application, in 1991, indicated significant opportunities for improvement, which acted as a catalyst for The Ritz-Carlton to benchmark dissimilar industries and thus create “cycles of improvement”—the line-up, the open-door policy, the annual employee survey, management by walking around and asking questions of staff and guests, the feedback from Baldrige, and all the other elements that make up the strategy for improvement. It worked, and in 1992 The Ritz-Carlton became the first service organization to win the Baldrige Award. In 1999, when The Ritz-Carlton won its second Baldrige award, examiners visited more than 30 domestic properties and then talked to all of the international properties by telephone. That’s a thorough site visit!
  • Every employee of The Ritz-Carlton has a wallet card with the mission and values of the organization. Most of the 12 service values are applicable to any organization:

Service values—I am proud to be Ritz-Carlton

1. I build strong relationships and create Ritz-Carlton guests for life.

2. I am always responsive to the expressed and unexpressed wishes and needs of our guests.

3. I am empowered to create unique, memorable, and personal experiences for our guests.

4. I understand my role in achieving the key success factors and creating The Ritz-Carlton Mystique.

5. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience.

6. I own and immediately resolve guest problems.

7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.

8. I have the opportunity to continuously learn and grow.

9. I am involved in the planning of the work that affects me.

10. I am proud of my professional appearance, language, and behavior.

11. I protect the privacy and security of our guests, my fellow employees, and the company’s confidential information and assets.

12. I am responsible for uncompromising levels of cleanliness, and creating a safe and accident-free environment.

These are outcomes that any company can infuse into its own internal processes. Who wouldn’t want to participate in plans to restructure their own work? Who wouldn’t want to feel empowered to fulfill the needs of customers? In this case, The Ritz-Carlton allows each employee to make corrections costing up to $2,000 each day. And guess what? The Ritz-Carlton tracks and publicizes employee acts of customer-service heroism and measures customer engagement, not the actual amounts spent. Finally isn’t it refreshing to know that there’s no buck passing? Whoever receives or hears about a problem, owns it and follows up to ensure its resolution.

  • Employees are surveyed yearly by The Gallup Organization, and the results are shared with all the ladies and gentlemen of The Ritz-Carlton. Open lines of communication are an integral part of the strategic plan, and one of the ingredients is the daily lineup. At every property worldwide and at every shift change a meeting of the staff is held. During this meeting a leader will focus on one of The Ritz-Carlton Service Values and discuss activities at the local property, such as guest arrivals or special events. In this fashion the staff is made to feel comfortable in discussing issues with the team, thus reinforcing the open-door policy. This is a strong element in the hotel’s success and one that I think other companies should adopt.
  • How does one recruit, hire, and train such extraordinary employees? The Ritz-Carlton uses the services of a company called Talent Plus, which has engineered a 60-minute interview process that can be conducted over the phone. This process extracts from potential employees information to make sure that they will fit into the hotel’s demanding culture. The questions address how the candidate might handle certain situations at work and asks for examples of work experiences. Many of The Ritz-Carlton human resource staff have been trained in this process, and thus many of the interviews take place at the local properties. Having participated first-hand in the Talent Plus process, I can attest to its thoroughness and effectiveness.

Previous experience in the tourist industry is helpful but not a prerequisite, according to Laura Gutierrez. It’s more important to have a positive attitude. Gutierrez says that talents are formed between the ages of five and eight, and it’s the function of the hiring manager to identify those talents and make sure that they’re in sync with the goals and culture of the hotel.

  • Successful organizations have a methodology for weeding out ineffectual practices and a way to correct defects. At The Ritz-Carlton that process is known as “MR. BIV”—an acronym for mistakes, rework, breakdowns, inefficiencies, and variation. The overall goal of MR. BIV is to foster an environment of open communication and continuous cycles of learning. It’s a systemic approach to problem solving that is used worldwide and that has stimulated numerous improvements in internal processes.
  • There has recently been some discussion in the papers about The Ritz-Carlton relaxing some of their standards to meet the expectations of a new breed of guest—one who might be more casual in appearance. According to John Timmerman, the standards remain the same but staff are empowered to treat guests “as they see themselves.” That means employees can break the rules of scripted procedures to satisfy a customer. For example, an employee can speed up the cycle time of the dining process if they feel the business customer prefers speed over formality, or slow down a process if the traveler wants a more informal and relaxed environment. Universally, service is at a very high level, and guests leave knowing that their every request has been honored.

Some guests make unusual requests because of the reputation of the hotel. “As long as it is not illegal or immoral, we will move heaven and Earth to fulfill requests,” John Timmerman says. That attitude has served the hotel well over the years, enabling it to rank consistently in the top tier of hotels worldwide. The Ritz-Carlton is currently ranked in first place by the Market Metrix Hospitality Index.

As a Baldrige examiner, I’m aware of numerous organizations that benchmark against the processes of The Ritz-Carlton, notably hospitals. It’s a simple equation—hospitals have rooms and processes to gain entrance to those rooms. Once a room isn’t occupied, how fast can the room be turned around for the next patient or guest? No one does this procedure better than The Ritz-Carlton, and hospitals are incorporating these procedures as their own.

Well, I think you can tell that I’m completely enamored with the processes at this award-winning hotel. I think that there are numerous processes that other organizations can copy that will allow those companies to distinguish themselves from their competition. There are many other techniques and processes that I could have touched on, but I think you have a flavor for this remarkable company. Meeting and exceeding customers’ expectations and fulfilling even their unexpressed wishes ought to be the clarion for all companies.

Several years ago, a reporter for a major newspaper attempted to test the customer service of the hotel and made unusual requests to gauge the response. One such request was to “Provide a room with seven pillows—four feathered and three foamed alternatively stacked, and a room facing south on a floor in the single digits.” The other requests were just as odd. He concluded, “I poked, I prodded, I tried to do everything in my power to drive those people crazy. Not once did they flinch, overact, or try to escort me out headfirst. They won.”

When a U.S. commander speaks to a group of soldiers, his words are often met with a hearty “Hoo-Ahh,” which means “Heard, Understood, and Acknowledged.” That’s what I wanted to say after my interviews with John and Laura, because everything they said resonated with me as a quality professional who has experienced the care and attention of the ladies and gentlemen of The Ritz-Carlton. This company should be benchmarked and held up as a role model. You can learn more by reviewing its 1999 application on the Baldrige Web site. There’s a storehouse of knowledge and information in those 24 pages, and it’s free.

Now I’m off to my local Ritz-Carlton to test their processes. I ordered a Roman chariot to transport me up the road from the hotel to Greenfield Village. I’ll let you know next month how it turned out. In the meantime, ”Hoo-Ahh!”

About the author
William J. Kalmar has extensive business experience, including service with a Fortune 500 company and the Michigan Quality Council, one of the top state quality award programs in the United States. He has been a member of the Malcolm Baldrige National Quality Award board of overseers and responsible for the management of a volunteer structure of more than 1,000 people in a statewide program patterned after the Baldrige program.

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